All posts by Amelia Jacobs

About Amelia Jacobs

Amelia Jacobs began her career in business following a surprisingly successful trip to China. Having visited the region as a tourist, she returned to America as an import-exporter. Today, Jacobs runs a thriving import-export company, splitting her time between Chicago and Shanghai. Contact Amelia at amelia[at]businessdistrict.com

Kellogg to Split into Three Companies

Brands, Companies, ,

The famed food manufacturing company Kellogg has announced that it will be splitting into three independent companies. The first will consist of Kellogg’s (K) North America cereals, the second is snacks, and the third is a new “pure-play plant-based foods company,” a shootoff of its MorningStar Farms brand.

The announcement from the 116-year-old iconic business comes a decade after Kellogg acquired Pringles. That sale was the beginning of a shift from a focus on cereals to snacks, following people’s tendencies to eat on the go and between meals.

In explaining the company’s decision, CEO Steve Cahillane affirmed that the move gives the chance for each spinoff to unlock its full potential. In an effort to grow shareowner value, splitting the business into individual entities enables each to realize the possibilities of its specific product line and reach appropriate financial goals.

The snack breakoff is destined to be the largest of the three, with over $11 billion in sales last year – 60% of sales coming from Pop-Tarts, Nutri-Grain, Cheez-It, and Pringles.

The new business split up is scheduled to be completed by the end of 2023.

Trump Getting Ready to Pull US Out of NAFTA

Trade, , , , ,

Reports have emerged that the Trump administration is taking concrete steps to pull the United States out of the North American Free Trade Agreement, also known as NAFTA.

According to Politico, two White House officials stated that a draft order to withdraw from NAFTA has already been submitted for the last stages of review, and could be released by the end of this week, or early next week.

The order was written by Trump’s head of the National Trade Council, Peter Navarro, in corroboration with the White House chief strategist Steve Bannon. It is still unclear what the order states, but the effect on trade can be predicted by an examination of the top 20 exports arriving from Mexico to the US.

In January Capital Economics’ chief emerging markets economist Neil Shearing published a chart in a memo to clients graphing the top 20 exports from Mexico according to their 2015 US dollar value.

About 25 percent of Mexico’s total exports to the US, by far the largest slice, came from the auto sector, valued at about $80 billion. The next three items are electrical components, food, and computers, together valued at about $55 billion.

“The upshot, then, is that targeted measures imposed on the vehicle, electronics, and food and beverage sectors would hit Mexico’s economy especially hard,” wrote Shearing. “Similarly, in the event of a blanket tariff across all sectors, producers in these areas would be among the hardest hit.”

In wake of the reports that Trump is on the verge of pulling out of NAFTA the peso is crashing, down over 2.2 percent at 19.2704 as of 12:53pm Wednesday afternoon.

Surprising Facts About Refugees to the US

News,

Immigrants on deck of steamer “Germanic.” Unknown photographer, 1887.

Immigration and how the US handles refugees seeking to live in the country of the free has been a hot subject in the news lately. Here are a few facts about refugees many people might not be aware of:

  • Refugees must repay the cost of the airfare to the United States. Although the government does pay for the flights of refugees to the US, that money is an interest-free loan which must be repaid as soon as the refugee begins to earn an income. That money is then funneled back into a fund that pays for additional refugees to be brought over.
  • Studies show that although there are costs involved in resettling refugees, the positive contribution they make to the economy balances out the expense. Money is spent mostly to provide social services like language and vocational training, healthcare and cash allowances. One study showed that in Cleveland, where 4,518 refugees were resettled between 2000 and 2012, 38 new businesses were started, yielding an additional 175 jobs and $12 million in spending in Cleveland in 2012.
  • Refugees must prove their status. International law states that a refugee is someone with a “well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling to return to it.” Being poor is not enough.
  • The process of resettlement is a long and arduous one. According to the World Bank Group, the average length of time a refugee waits in “limbo” until he is resettled is 10.3 years. The median is four years until a permanent home is found. Once the process of resettlement in the US begins, the minimum amount of time it takes is 18 months. Immigration lawyers say that it is not unusual for the process to take from four to eight years.

Small Businesses Also Included in Wells Fargo Scandal

News, , , , ,

Photo courtesy of Mike Mozart.

Louisiana’s Republican Senator David Vitter sent a letter on September 29, which was viewed by Reuters, to John Stumpf, chief executive of Wells Fargo, asking him to provide a “full accounting” of customers affected by their improper sales practices.

As a member of the US Senate’s banking committee and the head of its small business committee, Vitter wrote that discussions between congressional staffers and Wells Fargo representatives “have indicated that the fraudulent activity of your employees was not limited to Wells Fargo’s consumer banking operations. Thousands of small business owners were impacted by this fraud.”

Investigations by Vitter’s committee can point to Wells Fargo’s fraudulent practices being directed to about 10,000 small businesses in addition to the possible 2 million consumer accounts which Wells Fargo opened fraudulently. This new revelation comes about one month after the bank reached a settlement of $190 million with its customers for opening accounts for them without their knowledge.

The news of the bank’s behavior caused a sensation among consumers, resulting in the firing of about 5,300 employees for opening up accounts improperly.

Stumpf appeared before two congressional committees, and other oversite governmental authorities such as the Justice and Labor Departments, which led to investigations into the bank’s sales practices.

“While the vast majority of accounts in the settlement were consumer accounts, to the extent there were small business accounts included, all were previously reported in the total number of potentially impacted accounts,” said Wells Fargo spokeswoman Jennifer Langan. “As stated earlier, Wells Fargo has already refunded 115,000 accounts. The impacted accounts, including Small Business, were part of our Retail Bank business.”

But a Consumer Financial Protection Board spokesman said Langan’s words were incorrect. The two million accounts in the settlement did not included any small business accounts.

Unilever Buying Seventh Generation Green Products Brand

Companies, News, , , ,

Unilever PLC, the European consumer products powerhouse, agreed to purchase Seventh Generation Inc, maker of environment-friendly detergents and household cleansers, for $700 million.

The London-based giant, known for its popular brands such as Dove soaps and Axe deodorants, is looking to gain a toe hold into the growing market for “natural” cleaning products. Unilever had been in preliminary talks with a different company, Jessica Alba’s Honest Co. Actress Alba’s company claims to avoid any harsh chemicals in its cleaning products. Honest Co’s asking price was $1 billion, but the deal seems to have fallen through and is unlikely to happen.

Seventh Generation was founded in 1988 and is based in Vermont. The company has been growing steadily, and had sales of over $200 million last year. In 2007 an investment deal valued the company at $100 million.

“We look at this as having a multiplier effect for our business,” said Seventh Generation Chief Executive John Replogle, who will stay on to run the company. “We always aspired to be a billion-dollar brand. We see this as a springboard as opposed to throwing in the towel.”